$AZUR fka $FISH
TODAY, MAY 29, 2015
7:59 AM ET Azure Midstream Partners (formerly Marlin Midstream, FISH on the Nasdaq) begins trading on the NYSE today
Briefing.com

Marlin Midstream Partners, LP Changes Name to Azure Midstream Partners, LP and Expects to List Its Common Units on the New York Stock Exchange

12:19 PM ET 5/20/15 | GlobeNewswire

Marlin Midstream Partners, LP (Nasdaq:FISH) announced that effective immediately it changed its name from Marlin Midstream Partners, LP to Azure Midstream Partners, LP ("Azure"). The change is being made to give aligned identity to the Azure family of companies, Azure's employees and customers, and Azure's general partner. Also effective immediately, the general partner of Azure changed its name to Azure Midstream Partners GP, LLC.

"We are proud to introduce the new name of Azure Midstream Partners, LP, which better aligns the identity of Azure with that of our general partner and affiliated companies," said I.J. "Chip" Berthelot II, Chief Executive Officer of Azure.

New York Stock Exchange Listing

Azure submitted written notice to NASDAQ Global Market ("NASDAQ") to voluntarily delist its common units, and applied to list its common units on the New York Stock Exchange ("NYSE"). Management determined that the listing of Azure's common units on the NYSE is in the best interest of unitholders and the NYSE is better aligned with Azure's growth strategy, corporate identity and corporate governance structure. Azure intends to file a Form 25 with the Securities and Exchange Commission to effect the proposed delisting from NASDAQ. The delisting from NASDAQ is expected to become effective following the close of business on May 28, 2015, and Azure's common units are expected to commence trading on the NYSE at market open on May 29, 2015 under the ticker "AZUR." Until the transfer is complete, Azure's common units will continue to trade on NASDAQ under the ticker "FISH."

About Azure Midstream Partners, LP

Azure Midstream Partners, LP is a fee-based, growth oriented Delaware limited partnership formed to develop, own, operate and acquire midstream energy assets. Azure currently provides natural gas gathering, transportation, treating and processing services, NGL transportation services and crude oil transloading services. Headquartered in Dallas, Texas, Azure's assets include 723 miles of gathering lines in the horizontal Cotton Valley plays located in east Texas and north Louisiana, two natural gas processing facilities located in Panola County, Texas, a natural gas processing facility located in Tyler County, Texas, two NGL transportation pipelines that connect its Panola County and Tyler County processing facilities to third party NGL pipelines and three crude oil transloading facilities containing six crude oil transloaders. Additional information about Azure Midstream Partners, LP can be found at www.azuremidstreampartners.com.

About Azure Midstream Energy, LLC

Azure Midstream Energy, LLC is a midstream company with a focus on owning, operating, developing and acquiring midstream energy infrastructure in core producing areas in the United States. Azure Midstream Energy, LLC owns 100% of Azure Midstream Partners GP, LLC, and 90% of the incentive distribution rights of Azure. In addition to its ownership of Azure, Azure Midstream Energy, LLC provides natural gas gathering, compression, treating and processing services in north Louisiana and east Texas in the prolific Haynesville and Bossier Shale formations.

Forward Looking Statements

This press release contains forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning future actions, conditions or events, future operating results or the ability to generate revenues, income or cash flow or to make distributions are forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations of Azure may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond Azure's ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, conditions in the capital and credit markets; the ability to achieve synergies and revenue growth; national, international, regional and local economic, competitive and regulatory conditions and developments; technological developments; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; commodity prices; weather conditions; environmental conditions; business and regulatory or legal decisions; the timing and success of business development efforts; terrorism; and other uncertainties. In addition, an extensive list of specific material risks and uncertainties affecting Azure is contained in its 2014 Annual Report on Form 10-K and in our other public filings and press releases. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on Azure's results of operations or financial condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking statement.

View data
CONTACT: Institutional Investor Contact: Azure Midstream Partners, LP Eric T. Kalamaras - Chief Financial Officer (214) 206-9499 Retail Investor Contact: Azure Midstream Partners, LP Stephen Ciupak - Director of Financial Strategy (214) 646-1583 Media Relations Contact: Steven C. Sullivan (518) 587-5995

http://media.globenewswire.com/cache/27344/small/34277.jpg

http://www.globenewswire.com/newsroom/ti?nf=MTMjMTAxMzUzODIjMjczNDQ=

Marlin Midstream Partners (NASDAQ:FISH): Q1 net loss of -$7.62M.

Revenue of $17.32M (-8.0% Y/Y) misses by $4.08M.

Marlin Midstream Partners, LP Reports Fourth Quarter and Full Year 2014 Financial Results & 2015 Guidance

8:28 AM ET 3/10/15 | GlobeNewswire

Marlin Midstream Partners, LP (Nasdaq:FISH) ("Marlin"), announced financial results for the fourth quarter and full year 2014.

Full Year 2014 Highlights

-- Adjusted EBITDA for full year 2014 increased 103% over full year 2013 to $34.2 million

-- Distributable Cash Flow for full year 2014 increased 144% over 2013 to $31.6 million

-- Marlin paid its fourth quarter distribution of $0.365, or $1.46 annually, on February 11, 2015

-- The annualized fourth quarter distribution was an increase of 4% from 2013, and the distribution coverage ratio was 1.22x for full year 2014

Adjusted EBITDA for the fourth quarter 2014 was $7.7 million, a decrease of $0.8 million, compared to adjusted EBITDA of $8.5 million for the fourth quarter 2013. For full year 2014, adjusted EBITDA was $34.2 million compared to adjusted EBITDA of $16.9 million for full year 2013. The decrease in adjusted EBITDA for the fourth quarter 2014 was primarily due to lower gross margin from our gathering and processing segment as a result of reduced liquids recoveries and higher general and administrative costs, partially offset by higher gross margin from our logistics segment and lower operations and maintenance costs. The increase in adjusted EBITDA for full year 2014 was due to higher gross margin in both gathering and processing and logistics segments offset by an increase in general and administrative costs as we continued to invest in our business.

Distributable cash flow ("DCF") for the fourth quarter 2014 was $7.1 million, or $0.40 per limited partner unit, a decrease of $0.5 million compared to DCF of $7.6 million for the fourth quarter 2013. For the full year 2014, DCF was $31.6 million, or $1.79 per limited partner unit, compared to DCF of $13.0 million for the period from July 31, 2013 to December 31, 2013, the first applicable periods in which distributions were paid. Marlin declared and paid a cash distribution for the fourth quarter 2014 in the amount of $0.365 per unit, or $1.46 annually, which is a 4% increase over the annualized fourth quarter 2013. The distribution coverage ratio for the fourth quarter 2014 and full year 2014 was 1.08x and 1.22x, respectively.

Reconciliations of the non-GAAP financial measures adjusted EBITDA and DCF to net income, the most directly comparable GAAP financial measure, are provided at the end of this press release.

Net income was $4.5 million for the fourth quarter 2014 compared to net income of $4.4 million for the fourth quarter 2013. Net income was $22.1 million for full year 2014 compared to net income of $1.2 million for full year 2013.

Business Highlights

Sale of General Partner Interest and Contribution of Legacy Gathering System

On February 27, 2015, Marlin announced the successful completion of the contribution of the Legacy gathering system from Azure Midstream Energy, LLC ("Azure") for $162.5 million in consideration. In separate transactions, Azure acquired (i) 100% of Marlin Midstream GP, LLC, Marlin's general partner, (ii) 90% of Marlin Midstream GP, LLC's incentive distribution rights in Marlin, and (iii) an option to acquire 20% of NuDevco Midstream Development, LLC's ("NuDevco") 10.7 million limited partnership units in Marlin.

The transformative combination of Azure's substantial dropdown inventory, as well as Azure's contribution of its Legacy gathering system into Marlin's existing midstream assets creates a diverse platform of midstream services and establishes Marlin as one of the largest gathering and processing systems in the horizontal Cotton Valley play in east Texas and north Louisiana. Marlin is now comprised of 723 miles of high-and-low pressure gathering lines, 260 MMcf/d of processing capacity, 20,000 BBls/d of NGL takeaway capacity, and three crude oil transloading facilities.

Marlin's new President and Chief Executive Officer, I.J. "Chip" Berthelot, II, said, "We are excited to complete the transaction between Azure and Marlin. We are in the midst of executing on integration of the companies and combining Marlin's new and efficient processing assets with Legacy's expansive gathering footprint." Mr. Berthelot continued, "The enhanced scale of the new MLP will allow us to pursue both cost and commercial synergies at a faster pace and more competitively, thus maximizing greater value from the combined assets."

Additional Financial and Operating Highlights

Upon closing of the transactions, Marlin extended its Transloading Services Agreements and the minimum volume commitments associated with its Transloading Services Agreement with Associated Energy Services, LP ("AES"), an affiliated party. These services agreements are extended until February 27, 2020, or five years from the date of the amendment. In addition, effective October 1, 2014, AES elected to increase its minimum volume commitment under our fee-based gas gathering and processing agreement to 100 MMcf/d from 80 MMcf/d.

Marlin completed construction of its Longtail pipeline in March 2014 and the common inlet header between the Panola 1 and Panola 2 Processing Plants in May 2014 for a total combined cost of $5.2 million. The combined projects created greater margin optimization by maximizing value of inlet gas for processing.

Segment Results

Gathering & Processing Segment

Gross margin for the gathering and processing segment for the fourth quarter 2014 was $9.4 million, a decrease of $0.9 compared to gross margin of $10.3 million for the fourth quarter 2013. Gross margin for the gathering and processing segment for full year 2014 was $42.6 million, an increase of $9.5 million compared to gross margin of $33.1 million for full year 2013. Gas volumes processed were 185 MMcf/d and 203 MMcf/d for the fourth quarter 2014 and full year 2014, respectively, compared to 218 MMcf/d and 219 MMcf/d for the prior year periods, respectively.

Logistics Segment

Gross margin for the logistics segment for the fourth quarter 2014 was $4.2 million, an increase of $0.7 million compared to gross margin of $3.5 million for the fourth quarter 2013. Gross margin for the logistics segment for full year 2014 was $15.3 million, an increase of $9.5 million compared to gross margin of $5.8 million for full year 2013. Logistics segment provided 22,567 BBls/d and 20,473 BBls/d in transloading services during the fourth quarter 2014 and full year 2014, respectively, compared to 18,980 BBls/d and 18,980 BBls/d in the prior year periods, respectively.

Capital Management

On February 27, 2015, Marlin entered into a restructured and expanded credit facility that provides for enhanced liquidity and improved access to capital for accretive development and acquisition opportunities. The new $250 million revolving credit facility includes a syndicate of nine banks led by Wells Fargo Bank, N.A. as administrative agent with Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and SG Americas Securities, LLC as joint lead arrangers and has a maturity date of February 27, 2018.

As of December 31, 2014, Marlin had availability of $39.0 million and outstanding borrowings of $11.0 million associated with its existing revolving credit facility. As of December 31, 2014, Marlin had cash and cash equivalents of $2.6 million.

Capital expenditures for full year 2014 were $8.5 million, of which $1.4 million were related to maintenance capital expenditures and $7.1 million were related to expansion capital expenditures.

2015 Financial Guidance

The following projections for 2015 are based on management's current estimates and assumptions including producer and customer forecasts and are subject to risks and uncertainties. Please see the "Forward Looking Statements" at the end of the press release.

Marlin is targeting 2015 DCF of $1.65 - $1.80 per unit, an 18% increase from the mid-point range. We expect to realize a financial impact from the synergies of approximately $3.0 million to $5.0 million by the end of 2015. The savings are expected to be realized through the alignment of assets to maximize commercial and operating efficiencies, and corporate expense consolidation. Marlin's 2015 financial guidance excludes the effect of any potential third party acquisitions or drop down transactions with Azure.

View data
MARLIN MIDSTREAM PARTNERS, LP SELECTED BALANCE SHEET DATA (Unaudited) (In Thousands, except unit amounts) December 31, 2014 2013 Selected Balance Sheet Data: Cash and cash equivalents $ 2,603 $ 3,157 Total assets 171,838 174,142 Long term debt 11,000 4,000 Total partners' capital 154,430 160,550 Marlin Midstream Partners, LP Partners' Capital: Limited partner units outstanding 17,703,793 17,449,090

View data
MARLIN MIDSTREAM PARTNERS, LP SELECTED STATEMENTS OF OPERATIONS DATA (Unaudited) (In Thousands, except per unit amounts) Quarter Ended December 31, Year Ended December 31, 2014 2013 2014 2013 Total Operating Revenues $ 16,746 $ 16,108 $ 75,228 $ 52,860 Cost of natural gas, NGLs and condensate revenue 3,138 2,312 17,348 13,999 Operation and maintenance 3,782 3,895 16,231 16,253 General and administrative 2,120 1,432 7,358 5,728 Non-cash equity based compensation expense 442 1,728 1,963 3,012 Depreciation expense 2,249 2,105 8,817 8,197 Loss on disposals of equipment -- -- 60 -- Total Operating Expenses 11,731 11,472 51,777 47,189 Operating income 5,015 4,636 23,451 5,671 Interest expense, net of amounts capitalized and loss on derivatives 217 178 766 4,397 Net income before tax 4,798 4,458 22,685 1,274 Income tax expense 278 53 553 88 Net income $ 4,520 $ 4,405 $ 22,132 $ 1,186 Net income $ 4,520 $ 4,405 $ 22,132 $ 7,190 Less: East New Mexico Dropdown net income prior to acquisition -- -- (160) -- Less: general partner interest in net income (90) (88) (435) (144) Limited partner interest in net income $ 4,430 $ 4,317 $ 21,537 $ 7,046 Net income per limited partner unit - basic $ 0.25 $ 0.24 $ 1.23 $ 0.40 Net income per limited partner unit - diluted $ 0.25 $ 0.24 $ 1.21 $ 0.39

The following table presents a reconciliation of the non-GAAP financial measure of adjusted EBITDA and distributable cash flow to the GAAP financial measure of net income.

View data
For the period Quarter Ended Years Ended from July 31, December 31, December 31, 2013 to December 31 2014 2013 2014 2013 2013 (Unaudited) (In Thousands) Net income $ 4,520 $ 4,405 $ 22,132 $ 1,186 $ 7,190 Interest expense, net of amounts capitalized and gain/loss on interest rate derivatives 217 178 766 4,397 352 Income tax expense 278 53 553 88 60 Non-cash equity based compensation 442 1,728 1,963 3,012 3,012 Depreciation expense 2,249 2,105 8,817 8,197 3,425 Adjusted EBITDA $ 7,706 $ 8,469 $ 34,231 $ 16,880 $ 14,039 Less: Maintenance capital expenditures (183) (649) (1,384) (782) Cash interest expense (158) (130) (510) (215) Income tax expense (278) (53) (553) (60) Other -- -- (160) -- Distributable cash flow $ 7,087 $ 7,637 $ 31,624 $ 12,982 DCF per limited partner unit $ 0.40 $ 0.44 $ 1.79 $ 0.74 Distributions to limited partners $ 6,462 $ 6,107 $ 25,514 $ 10,121 Distributions per limited partner unit $ 0.365 $ 0.350 $ 1.44 $ 0.58 Distribution coverage ratio 1.08x 1.23x 1.22x 1.26x

View data
MARLIN MIDSTREAM PARTNERS, LP SELECTED OPERATING SEGMENT DATA (Unaudited) (In Thousands) Quarter Ended December 31, Year Ended December 31, 2014 2013 2014 2013 Gathering and Processing Segment Revenues $ 12,523 $ 12,617 $ 59,926 $ 47,052 Cost of revenues 3,138 2,312 17,348 13,999 Gross Margin 9,385 10,305 42,578 33,053 Operating expenses 5,334 5,562 22,925 23,814 Gas volumes (MMcf/d) 185 218 203 219 Logistics Segment Revenues $ 4,222 $ 3,492 $ 15,302 $ 5,808 Gross Margin 4,222 3,492 15,302 5,808 Operating expenses 695 73 2,183 636 Transloading volumes (BBls/d) 22,567 18,980 20,473 18,980

Fourth Quarter and Full Year 2014 Conference Call and Webcast

Marlin will host a conference call to discuss fourth quarter and full year 2014 results at 10:00 am CT (11:00 am ET) on March 10, 2015.

Interested parties can listen to a live webcast of the call from the Events & Presentations page of the Marlin Investor Relations website at http://investor.marlinmidstream.com/events.cfm. An archived replay of the webcast will be available for 12 months following the live presentation.

The call can be accessed live over the telephone by dialing 1-877-815-2357, 1-330-968-0354 for international callers. The conference ID for the call is 98877911. A telephonic replay of the call will be available for 7 days and can be accessed by dialing 1-855-859-2056 or 1-404-537-3406 for international callers, with conference ID number 98877911.

About Marlin Midstream Partners, LP

Marlin is a fee-based, growth oriented Delaware limited partnership formed to develop, own, operate and acquire midstream energy assets. Marlin currently provides natural gas gathering, transportation, treating and processing services, NGL transportation services and crude oil transloading services. Headquartered in Dallas, Texas, Marlin's assets include 723 miles of gathering lines in the horizontal Cotton Valley plays located in east Texas and north Louisiana, two natural gas processing facilities located in Panola County, Texas, a natural gas processing facility located in Tyler County, Texas, two NGL transportation pipelines that connect its Panola County and Tyler County processing facilities to third party NGL pipelines and three crude oil transloading facilities containing six crude oil transloaders.

www.marlinmidstream.com

About Azure Midstream Energy, LLC

Azure is a midstream company with a focus on owning, operating, developing and acquiring midstream energy infrastructure in core producing areas in the United States. Azure owns 100% of Marlin Midstream GP, LLC, Marlin's general partner, and 90% of the incentive distribution rights in Marlin. In addition to its ownership of Marlin, Azure provides natural gas gathering, compression, treating and processing services in north Louisiana and east Texas in the prolific Haynesville and Bossier Shale formations.

www.azuremidstream.com

Use of Non-GAAP Financial Measures

We report financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). We also present adjusted EBITDA and distributable cash flow each of which are non-GAAP financial measures. We define gross margin as total revenues less cost of natural gas, NGLs and condensate revenues. We define adjusted EBITDA as net income (loss) before interest expense (net of amounts capitalized) or interest income, plus income tax expense, depreciation expense, equity based compensation expense, gains or losses on derivative instruments and certain non-recurring expenses. We define distributable cash flow as adjusted EBITDA plus cash interest income, less cash interest paid and maintenance capital expenditures. Our definitions of these non-GAAP financial measures may differ from the definitions of similar measures used by other companies. Management uses these non- GAAP financial measures in making financial, operating and planning decisions and in evaluating our financial performance. Furthermore, management believes that these non-GAAP financial measures may provide users with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of our core ongoing business. These measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Reconciliations of GAAP to non-GAAP financial measures are attached to this release.

Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning future actions, conditions or events, future operating results or the ability to generate revenues, income or cash flow or to make distributions are forward-looking statements. The forward-looking statements in this press release include statements regarding Marlin and its affiliates, including statements about (1) the benefits of the recent transactions described herein, including Marlin's ability to successfully make future acquisitions, to maintain or increase future distributions, and to capitalize on certain commercial and operational synergies, (2) future expectations and projections of results of operations or financial condition and (3) the anticipated financial performance of Marlin for the fiscal year 2015. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations of Marlin may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond Marlin's ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, conditions in the capital and credit markets; the ability to achieve synergies and revenue growth; national, international, regional and local economic, competitive and regulatory conditions and developments; technological developments; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; commodity prices; weather conditions; environmental conditions; business and regulatory or legal decisions; the timing and success of business development efforts; terrorism; and other uncertainties. In addition, an extensive list of specific material risks and uncertainties affecting Marlin is contained in its 2013 Annual Report on Form 10-K, as amended, and in our other public filings and press releases. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on Marlin's results of operations or financial condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking statement.

CONTACT: Investor Contact:
Marlin Midstream Partners, LP
Eric T. Kalamaras - Chief Financial Officer
(214) 206-9499

http://media.globenewswire.com/cache/27344/small/21685.jpg

http://www.globenewswire.com/newsroom/ti?nf=MTMjMTAxMjQwMTAjMjczNDQ=

Marlin Midstream Partners, LP's to Acquire Legacy Gathering System for $162.5 Million From Azure Midstream Energy, LLC and Marlin's General Partner to be Acquired by Azure, Forming ~$500 Million Midstream Partnership With Significant Inventory of Future Dropdowns

January 15, 2015 07:00 ET | Source: Marlin Midstream Partners, LP

-Marlin to acquire the Legacy gathering system from Azure for $162.5 million
-Marlin's general partner and 90% of its incentive distribution rights to be acquired by Azure
-Combination creates a Partnership with an enterprise value of over $500 million with a significant inventory of assets for future dropdowns from Azure

HOUSTON, Jan. 15, 2015 (GLOBE NEWSWIRE) -- Marlin Midstream Partners, LP (Nasdaq:FISH) ("Marlin" or the "Partnership") today announced that Marlin, its sponsor, NuDevco Midstream Development, LLC ("NuDevco") and Azure Midstream Energy, LLC ("Azure") have entered into definitive agreements that will result in Azure owning 100% of the general partner of Marlin and 90% ownership of the total outstanding incentive distribution rights ("IDRs") in Marlin. In addition, Azure's Legacy gathering system (the "Legacy system") will be contributed to Marlin for $162.5 million (the "Dropdown Acquisition", collectively the "Proposed Transactions"). NuDevco will retain all of its 10.7 million LP units, or 59.2% ownership stake, in Marlin, subject to an option granted to Azure to acquire 20% of such units from NuDevco in order to align interests and incentivize unit holder value creation.

The Legacy system consists of approximately 658 miles of high- and low-pressure gathering lines primarily under fixed-fee contracts that serve approximately 100,000 dedicated acres predominantly in the Cotton Valley formation in east Texas and northern Louisiana with access to seven major downstream markets. The Dropdown Acquisition is expected to be immediately accretive to Marlin's distributable cash flow and the cash portion of consideration is expected to be fully funded under Marlin's $225 million amended credit facility. The Proposed Transactions will result in a Partnership with a total enterprise value of over $500 million and new sponsorship provides visibility into future dropdowns.

Azure will retain the Center gathering system (the "Center system") and the Holly gathering system (the "Holly system") at the general partner level for future potential dropdown acquisitions into the Partnership over time. Azure gained control of the Center system, the Holly system and the Legacy system assets through the acquisition of TGGT Holdings, LLC from EXCO Resources, Inc. and BG Group plc and the acquisition of an ownership interest in the East Texas Gathering system from Tenaska Capital Management, LLC in November 2013 for total consideration of approximately $1.05 billion. The Center system consists of approximately 372 miles of high-pressure pipeline serving multiple formations, including the Haynesville, Bossier and the liquids-rich James Lime formation across approximately 370,000 dedicated gross acres primarily located in east Texas. The Holly system consists of approximately 335 miles of high- and low-pressure pipeline serving the Haynesville and Bossier Shale formations and the liquids-rich Cotton Valley formation across approximately 69,000 dedicated gross acres primarily located in northern Louisiana.

The combination of Azure and Marlin creates a diverse platform of midstream assets creating one of the largest gathering and processing systems in the Haynesville and horizontal Cotton Valley plays in east Texas and northern Louisiana. The combination is expected to offer enhanced scale and diversification that provides additional financial flexibility that will allow the combined Partnership to compete for greenfield development and acquisition opportunities across the midstream value chain. Further, the combination of a significant portfolio of long-term, fee-based contracts with high-quality producers, coupled with the potential for organic capital opportunities across multiple geographies, provides meaningful visibility to long-term growth for the Partnership. The complementary services offered by Azure and Marlin are also expected to create attractive operational and financial synergies for both entities.

Marlin's Chairman and Chief Executive Officer, W. Keith Maxwell III, said, "We are excited to combine our assets with Azure and look forward to a successful collaboration of our talented employees to build a first class midstream services provider. This transaction diversifies and expands the Partnership's service offerings and customer base, and positions the combined Partnership for materially accelerated distribution growth over the coming years that is immediately accretive to Marlin unitholders, including the common and subordinated units that I, indirectly through NuDevco, continue to own. Further, we expect Azure's seasoned management team and high quality operating assets will create additional value from Marlin's existing and now expanded asset base."

"This transaction advances Azure's strategic objectives of becoming part of a larger, public MLP capable of providing access to growth capital for acquisitions, and further diversifies our customer base and midstream service offerings by expanding Azure with Marlin's new and efficient processing assets within our core areas," said I.J. "Chip" Berthelot, Chief Executive Officer, President and Director of Azure. "With this combination, we have expanded the set of services offered to our customers. This enables us to capture significant synergies between the systems and maximize returns on future investments, as well as compete more effectively for bolt-on acquisitions and step-out expansions in other areas."

Expected Closing

The Proposed Transactions are expected to close during the first quarter of 2015, subject to customary closing conditions and necessary financings. The Proposed Transactions are not conditioned upon the approval of the holders of the limited partner interests of Marlin.

Strategic Rationale

Strong sponsorship with continued alignment of interests to drive unitholder value: Azure is fully incentivized to grow distributions at the Partnership via capitalizing on synergies and potential drop downs into the Partnership over time. Additionally, Azure's sponsors, Energy Spectrum and Tenaska Capital Management can provide access to substantial investment capital and a broad portfolio of midstream energy assets to facilitate new business opportunities.
Increased size, scale, and diversity: Together, Azure and Marlin have a unique and diverse set of midstream assets and services with long-term growth potential and operating and financial synergies in the long-lived, natural gas production from east Texas and northwest Louisiana. The combined Partnership is expected to generate 2015 EBITDA of approximately $47 - 53 million and to have a total enterprise value of over $500 million. By building scale, the Partnership expects to have increased access to capital at an improved cost that will better position the Partnership to secure and execute on sizable and accretive organic development and acquisition opportunities.
Greater cash flow stability and visibility: Approximately 86% of the combined Partnership's expected 2015 gross margin is under fixed-fee contracts, 52% of which is under firm, minimum volume commitment contracts with minimal commodity price risk.
Distribution growth potential: A significant existing inventory that potentially can be dropped down to the Partnership, coupled with Azure's current senior management team that has a significant track record of value creation from both major greenfield project development and acquisitions with enhanced dropdown and acquisition focus, positions the Partnership to target mid-double digit distribution growth over the next several years, placing the partnership as a top-tier distribution growth Master Limited Partnership.
Significant revenue and cost synergies: Given the complementary nature of Azure and Marlin's business operations, the Partnership is positioned to realize significant commercial and operating synergies as a result of the combination. In addition, it is management's intent to further expand across the value chain through future development opportunities and incremental third party acquisitions. Azure and Marlin expect to fully realize a financial impact from the synergies of approximately $6 to $13 million on an annual run rate within the next 12-24 months. Savings are expected to be realized through the alignment of assets to maximize commercial and operating efficiencies, and corporate expense consolidation, as well as significant cost of capital cost savings.
Future Dropdown Potential from Azure

The two remaining gathering systems of Azure comprising the Center system and the Holly system are expected to be available as future potential dropdown acquisitions into Marlin.

The Center system is primarily located within the San Augustine, Nacogdoches, Sabine, Panola and Shelby counties in east Texas and currently serves multiple formations with 370,000 dedicated acres from the Haynesville, Bossier and the liquids-rich James Lime formations. The Center system consists of approximately 372 miles of high-pressure pipeline covering a wide range of undedicated and undeveloped acreage. The system is capable of supporting significant incremental growth without deploying large amounts of additional capital. The Center system includes six amine treating plants with combined capacity of 952 MMcf/d, 2,680 horsepower of compression, and access to five major interconnect access points that offer customers superior deliverability. The Center system is supported by gas gathering agreements with several customers; some of which include minimum revenue commitments through 2020.

The Holly system is primarily located within the Desoto, Red River and Caddo parishes of northern Louisiana and currently serves the Haynesville and Bossier Shale formations and the liquids-rich Cotton Valley formation. The Holly system consists of approximately 335 miles of high- and low-pressure pipeline serving approximately 69,000 of life of lease, dedicated gross acres that have throughput of approximately 625 MMcf/d for the preceding nine month period. The Holly system also includes four amine treating plants with combined capacity of 920 MMcf/d and 2,680 horsepower of compression. The Holly system connects to eight downstream access points, providing shippers with access to significant off-take capacity.

The Holly and Center systems are supported by gas gathering agreements with both BG Group, plc and EXCO Resources, Inc. pursuant to which both parties have jointly agreed to a 584 MMcf/d minimum volume commitment with respect to their collective production gathered by both systems.

Headquarters and Management

Upon closing of the Proposed Transactions, the combined Partnership will have its corporate office headquartered in Dallas, Texas with a continuing commercial presence in Houston, Texas. The combined Partnership will be led by Azure's current executive management team, including Mr. Berthelot, currently Chief Executive Officer, and Azure's team of midstream veterans. The remaining partnership positions will be comprised of both Azure and Marlin personnel. The combined Partnership's newly constituted Board of Directors will include representatives from both Azure's principal sponsors, Energy Spectrum Capital, and Tenaska Capital Management, Independent Directors, and Marlin. The final composition of the Board of Directors is expected to be finalized prior to the closing of the Proposed Transactions. Upon closing, Marlin's Chairman and Chief Executive Officer, Mr. Maxwell will step down from day-to-day management at Marlin; however, Mr. Maxwell has elected to maintain 100% of his common and subordinated unit equity stake in the combined Partnership, subject to Azure's option with respect to 20% of those units. Additionally, Mr. Maxwell will continue to serve as a director of the combined Partnership. Following the closing, NuDevco and Mr. Maxwell will own 10% of Marlin's incentive distribution rights, 1.9 million limited partner units and 8.7 million subordinated units.

Legacy System Dropdown Acquisition

The Legacy system is primarily located within Harrison, Panola and Rusk counties in Texas and Caddo parish in Louisiana and currently serves the Cotton Valley formation, the Haynesville Shale formation and the shallower producing sands in the Travis Peak formation. The Legacy system consists of approximately 658 miles of high- and low-pressure gathering lines and served approximately 100,000 dedicated acres with access to seven major downstream markets.

The Legacy system is expected to be accretive to Marlin's distributable cash flow during 2015 and is expected to enable Marlin to increase its 2015 distribution to $1.65 - $1.80 per unit, an 18% increase from the mid-point of the range.

The Legacy system has access to producing acreage not directly accessible to Marlin, offering an immediate step-out opportunity. The Legacy system cash flows are primarily fee-based anchored by long-term contracts with primary terms through 2017 and 2022. Major customers contracted on the Legacy system include BP plc and Devon Energy Corporation among others. The transaction is subject to customary closing conditions, lender approvals, and obtaining necessary financing.

Advisors

Wells Fargo Securities, LLC acted as the exclusive financial advisor to NuDevco, and Andrews Kurth LLP acted as legal counsel for NuDevco. Simmons & Company International acted as the exclusive financial advisor to Marlin's Conflicts Committee, and Akin Gump Strauss Hauer & Field LLP acted as legal counsel for Marlin's Conflicts Committee.

BofA Merrill Lynch acted as the exclusive financial advisor to Azure, and Vinson & Elkins LLP and Latham Watkins LLP acted as legal counsel for Azure.

Conference Call

The Partnership will host a conference call Thursday, January 15, 2015, at 1:00 p.m. EST to discuss the Proposed Transactions. The conference call may be accessed live at the investor relations section of the Marlin website at www.marlinmidstream.com. The live call may also be accessed by dialing 1-877-815-2357 for domestic users or 1-330-968-0354 for international users. The passcode for both phone numbers is 67832655. Additionally, a presentation summarizing transaction highlights will be available on the Marlin website prior to the call.

A replay of the audio webcast may be accessed on the Marlin website shortly following the conference call and will be available through January 22, 2015. The replay may also be accessed by dialing 1-855-859-2056 for domestic users or 1-404-537-3406 for international users. The passcode for both phone numbers is 67832655. Follow up inquiries regarding the Proposed Transactions should be directed to Eric Kalamaras at 214-206-9499.

About Marlin Midstream Partners, LP

Marlin is a fee-based, growth oriented Delaware limited partnership formed to develop, own, operate and acquire midstream energy assets. Marlin currently provides natural gas gathering, transportation, treating and processing services, NGL transportation services and crude oil transloading services. Headquartered in Houston, Texas, Marlin's assets include two related natural gas processing facilities located in Panola County, Texas, a natural gas processing facility located in Tyler County, Texas, two natural gas gathering systems connected to its Panola County processing facilities, two NGL transportation pipelines that connect its Panola County and Tyler County processing facilities to third party NGL pipelines and three crude oil transloading facilities containing six crude oil transloaders.

www.marlinmidstream.com

About Azure Midstream Energy, LLC

Azure is a midstream company with a focus on owning, operating, developing and acquiring midstream energy infrastructure in core producing areas in the United States. Azure currently provides natural gas gathering, compression, treating and processing services in northern Louisiana and east Texas in the prolific Haynesville and Bossier Shale formations, the liquids-rich Cotton Valley formation and the shallower producing sands in the Travis Peak formation.

www.azuremidstream.com

About Energy Spectrum Capital

Energy Spectrum Capital, together with its affiliated funds, is an energy and midstream focused private equity firm that has raised over $3.5 billion in capital commitments focused on investing in North America's energy infrastructure.

www.energyspectrum.com

About Tenaska Capital Management

Tenaska Capital Management, together with its affiliated funds, is a leading private equity firm focused on North America energy investments that has completed over $6.5 billion of acquisitions and development projects, primarily in the power and midstream sectors.

www.tenaskacapital.com

Cautionary Language

This press release contains forward-looking statements. These forward-looking statements are identified as any statement that does not relate strictly to historical or current facts. In particular, statements, express or implied, concerning future actions, conditions or events, future operating results or the ability to generate revenues, income or cash flow or to make distributions are forward-looking statements. The forward-looking statements in this press release include statements regarding Azure and Marlin and their respective affiliates, including statements about (i) the parties ability to consummate the transactions described herein, (ii) the benefits such transactions will provide to Marlin, including Marlin's ability to successfully make future acquisitions, to maintain or increase future distributions, and to capitalize on certain commercial and operational synergies and (iii) the anticipated financial performance of Marlin following the completion of the transactions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future actions, conditions or events and future results of operations of Azure and Marlin may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results are beyond Azure's and Marlin's ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, conditions in the capital and credit markets; the ability to achieve synergies and revenue growth; national, international, regional and local economic, competitive and regulatory conditions and developments; technological developments; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; commodity prices; weather conditions; environmental conditions; business and regulatory or legal decisions; the timing and success of business development efforts; terrorism; and other uncertainties. There is no assurance that any of the actions, events or results of the forward-looking statements will occur, or if any of them do, what impact they will have on Azure's and Marlin's results of operations or financial condition. Because of these uncertainties, you are cautioned not to put undue reliance on any forward-looking statement.

Investor Relations Contact
Azure Midstream Partners, LLC
Eric T. Kalamaras - Chief Financial Officer
214-206-9499

Media Relations Contact
Steven C. Sullivan
518-587-5995
- See more at: http://globenewswire.com/news-release/2015/01/15/697637/10115669/en/Marlin-Midstream-Partners-LP-s-to-Acquire-Legacy-Gathering-System-for-162-5-Million-From-Azure-Midstream-Energy-LLC-and-Marlin-s-General-Partner-to-be-Acquired-by-Azure-Forming-500.html#sthash.qAlK4dwH.dpuf

Marlin Midstream Resumed at Neutral by Janney >FISH

Dec 04, 2014 17:57:00 (ET)


(END) Dow Jones Newswires

December 04, 2014 17:57 ET (22:57 GMT)


Copyright (c) 2014 Dow Jones & Company, Inc.

Delicious looking Stock

52 - Week Range
15.93 - 21.80
12/20/13 - 9/23/14

Avg Volume (10 days)73,109
P/E (Trailing 12 mo.) 11.03x
EPS (Trailing 12 mo.) 1.635

Next Earnings Date 2/27/15
Market Cap 326.7 M
Shares Outstanding 18.1 M
Beta --
Dividend Yield 8.07%
Quarterly Dividend 0.365
Ex-Dividend Date 10/28/14
Dividend Payable Date 11/4/14